The Department for Levelling Up, Housing and Communities (DLUHC) has provided “little information to dispute” that the Treasury has lost trust in its ability to spend public money, Clive Betts has said.
The chair of the Levelling Up, Housing and Communities Committee stated that correspondence from Dehenna Davison, levelling up minister, has still left questions unanswered regarding DLUHC’s capital spending ban and its potential impact on levelling up projects.
In February, a report in the Financial Times stated that DLUHC had been “banned from making spending decisions on new capital projects”, which will instead need Treasury sign-off. In response to the report, Betts wrote to the government in March inquiring about the imposed restrictions and to clarify how capital spending restrictions will impact ongoing projects.
In response to the letter, Davison wrote: “There were no specific concerns raised by the Treasury about the department’s ability to deliver value for money. The new capital delegation approach does not affect the department’s responsibilities for the use of public money.”
However, Betts stated that this response “provides little information to dispute the notion that the Treasury no longer appears to trust DLUHC to spend money without Treasury approval”.
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In her letter, Davison also stated that the new delegation approach only concerns new programmes or projects that the department is yet to adopt. She also detailed that there is no change to the decision-making framework for existing capital programmes and projects as well as to the department’s budgets.
Davison added: “Thus, there is no impact on the Levelling Up Fund. The fund retains a budget of £4.8bn and there is no change to the way the fund has been allocated in the past.”
Betts outlined that there “continues to be questions about the new projects that will be affected and what this says about the government’s commitment to levelling up”.
“We will reflect on these issues in our upcoming committee report on levelling-up funds and making a series of recommendations to government on the allocation, delivery and funding for levelling-up,” he added.
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